The Hidden Cost of Payment Failures

Available data highlights the magnitude of this issue. In 2020, failed payments were estimated to contribute to a substantial $118.5 billion loss on the global economy, encompassing fees, labor, and lost business due to payment failures. The study also found that up to 60% of organizations reported losing customers due to failed payments, underscoring the potential impact on customer retention and satisfaction.

In 2023, global e-commerce losses due to online payment fraud were estimated at $48 billion, with projections suggesting cumulative losses could surpass $343 billion by 2027. However, beyond fraud, other factors also contribute significantly to cart abandonment, such as technical glitches, declined transactions, and limited payment options. Studies indicate that up to 50% of e-commerce customers abandon their carts due to payment-related issues.

Additionally, 69% of consumers report abandoning their shopping cart if their preferred payment method isn’t available. This statistic emphasizes the importance of offering diverse payment options to better align with customer preferences.

The Role of Payment Orchestration

Payment orchestration emerges as a solution that may help address these challenges by integrating multiple payment service providers, gateways, and methods into a single, streamlined platform. This integration can enable intelligent transaction routing, potentially ensuring that payments are processed through efficient channels, thereby reducing failures and enhancing the customer experience.

Key potential benefits of payment orchestration include:

• Expanded Payment Options: By supporting various payment methods, businesses may better serve diverse customer preferences.
• Higher Conversion Rates: Smart routing could direct transactions to the suitable payment processor, potentially reducing false declines and improving acceptance rates.
• Lower Costs: Consolidating multiple payment providers into a single platform might streamline operations, reduce manual effort, and lead to savings.
• Stronger Security: Advanced security features such as tokenization, encryption, and fraud detection mechanisms can help protect sensitive customer information and mitigate the risk of data breaches.

Bridging the Gap Between Potential and Profit

The global market for payment orchestration platforms has grown substantially. It was valued at $1.2 billion in 2023 and could reach $6.3 billion by 2032, growing at an annual rate of approximately 19%. This growth reflects the rising recognition of the importance of efficient payment processing in e-commerce.

By adopting payment orchestration platforms, businesses may recover lost revenue due to payment failures and potentially enhance customer satisfaction and loyalty. In an era where customer experience plays a crucial role, ensuring a seamless and secure payment process is increasingly important.

BridgerPay’s Bridger Retry™: A Strategic Solution

BridgerPay, a prominent payment orchestration platform, offers a feature called Bridger Retry™ aimed at addressing the issue of failed transactions. This technology automatically attempts to route failed transactions through alternative payment providers in real time, using smart logic and past performance data. Reports suggest it helps businesses recover up to 30% of previously declined transactions.

Bridger Retry™ has shown varying success rates across different regions:

• North America: As much as 3.8% of declined transactions recovered.
• Europe: An average recovery rate of 6%.
• Asia: Reportedly leading with a 20% success rate.

This feature appears particularly effective in rescuing “soft declines,” or transactions that fail due to temporary issues rather than insufficient funds. BridgerPay attempts to reroute these transactions, potentially improving the likelihood of successful payments without requiring additional customer input. For instance, a soft decline might occur due to a temporary network issue or a brief service outage at the customer’s bank.

Turn Payment Pain Points into Profit

Payment failures and cart abandonment represent a significant, yet often overlooked, opportunity for revenue recovery in e-commerce. By leveraging payment orchestration platforms that include intelligent retry mechanisms, businesses may address the root cause of these issues, streamline their payment processes, and potentially convert losses into profits. This is not just a problem, but an area of meaningful opportunity for growth and success.

Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or commercial advice. The figures and statistics cited are based on publicly available data and industry reports, which may be subject to change. Readers should conduct their own research or consult with a qualified professional before making business or investment decisions.